Self-driving cars will require new business models

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Top Highlights

• Carmakers, tech companies and ride-hailing firms are all fighting for a piece of the action

• IDAR sensors are still so expensive that, deployed in production cars, they would cost more than the rest of the vehicle put together

• ehicles will be operating, and thus generating revenue,

• getting AVs to work safely and reliably is much easier if their geographical range is limited to places that have been mapped in fine detail

• Large-scale deployments of AVs are most likely to start with geofenced robotaxi services

• likely to be many years before AVs are cheap enough for individuals to buy

• capable enough to operate outside predefined, geofenced areas.

• “the most profound challenge to their business models in a century”

• carmakers are now piling into ride-hailing and car-sharing services and pushing on with their own AV programmes.

• Some carmakers have launched their own mobility services; others may prefer to act as fleet managers

• Turning themselves into asset managers for such fleets would be a logical step for carmakers, whose finance arms are already involved in fleet management,

• Pricing models for users will change

• telecoms-like monthly price plans in some cities

• switching to shared robotaxis that operate around the clock could greatly reduce the number of vehicles on the road.

• Making vehicles reliably in large quantities is hard

• So even in a world of robotaxis, being a carmaker could still be a big business—just a different one from what it is today.

• That requires taking on new staff, retraining, acquisitions and partnerships.

• AVs will also accelerate the switch to electric vehicles, which have fewer components and need fewer assembly workers.

• AVs can assume a much wider range of shapes and sizes

• Repair shops and partsmakers could also suffer, assuming AVs reduce the number of car accidents.